Coles will pay dairy co-operative, Norco, around $5.25 million for distribution to its dairy farmer members.
This payment follows an ACCC investigation into whether the retailer has “fully passed” on to Norco the 10 cents per litre (cpl) price rise it charged consumers for Coles-branded fresh milk, as it claimed it would do in marketing materials.
Coles has committed in writing to the ACCC that it will pay an additional 7 cpl for 2lt and 3lt Coles-branded fresh milk. According to the ACCC, this amounts to around $5.25 million to Norco for milk supplied between 1 April 2019 and 30 June 2020, resolving the investigation.
The investigation
The ACCC says it had been investigating allegations that, in a media release, social media posts and in-store signage, Coles represented that the full benefit of the 10 cpl retail price increase of its Coles-branded 2lt and 3lt milk announced on 19 March 2019, would be passed on to farmers.
The investigation focused on claims that when an unrelated 6.5 cpl increase commenced on 1 April 2019, Coles reduced its payments to Norco under the 10 cpl retail price increase from 10 cpl to 3.5 cpl.
“We were fully prepared to take Coles to court over what we believe was an egregious breach of the Australian Consumer Law,” ACCC Chair Rod Sims said.
“We believe we had a strong case to allege misleading conduct by Coles.
“Accepting this commitment means that farmers will receive additional payments from Coles, with the majority of the money to be paid to Norco within seven days.
“Court action would also have taken many months if not years, with no guarantee that any money would have been paid to farmers as a result.”
